Was The Smart Money Right About QUALCOMM?

We at Insider Monkey have gone over 887 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article, we look at what those funds think of QUALCOMM, Incorporated (NASDAQ:QCOM) based on that data.

QUALCOMM, Incorporated (NASDAQ:QCOM) investors should be aware of a decrease in hedge fund sentiment in recent months. QUALCOMM, Incorporated (NASDAQ:QCOM) was in 85 hedge funds’ portfolios at the end of December. The all time high for this statistic is 87. There were 87 hedge funds in our database with QCOM positions at the end of the third quarter. Our calculations also showed that QCOM isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s review the latest hedge fund action surrounding QUALCOMM, Incorporated (NASDAQ:QCOM).

Do Hedge Funds Think QCOM Is A Good Stock To Buy Now?

Heading into the first quarter of 2021, a total of 85 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -2% from the third quarter of 2020. By comparison, 67 hedge funds held shares or bullish call options in QCOM a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in QUALCOMM, Incorporated (NASDAQ:QCOM) was held by Matrix Capital Management, which reported holding $508.4 million worth of stock at the end of December. It was followed by Polar Capital with a $220.6 million position. Other investors bullish on the company included Adage Capital Management, Millennium Management, and D E Shaw. In terms of the portfolio weights assigned to each position Think Investments allocated the biggest weight to QUALCOMM, Incorporated (NASDAQ:QCOM), around 6.04% of its 13F portfolio. Tiger Management is also relatively very bullish on the stock, designating 5.65 percent of its 13F equity portfolio to QCOM.

Because QUALCOMM, Incorporated (NASDAQ:QCOM) has experienced bearish sentiment from the smart money, we can see that there is a sect of hedgies who were dropping their positions entirely by the end of the fourth quarter. At the top of the heap, Dmitry Balyasny’s Balyasny Asset Management cut the largest investment of the “upper crust” of funds tracked by Insider Monkey, comprising close to $61.4 million in stock. Brandon Haley’s fund, Holocene Advisors, also cut its stock, about $34.1 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds by the end of the fourth quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as QUALCOMM, Incorporated (NASDAQ:QCOM) but similarly valued. We will take a look at T-Mobile US, Inc. (NYSE:TMUS), Costco Wholesale Corporation (NASDAQ:COST), BHP Group (NYSE:BHP), Novo Nordisk A/S (NYSE:NVO), Chevron Corporation (NYSE:CVX), Eli Lilly and Company (NYSE:LLY), and McDonald’s Corporation (NYSE:MCD). All of these stocks’ market caps are closest to QCOM’s market cap.

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As you can see these stocks had an average of 52.7 hedge funds with bullish positions and the average amount invested in these stocks was $4043 million. That figure was $2728 million in QCOM’s case. T-Mobile US, Inc. (NYSE:TMUS) is the most popular stock in this table. On the other hand BHP Group (NYSE:BHP) is the least popular one with only 20 bullish hedge fund positions. QUALCOMM, Incorporated (NASDAQ:QCOM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for QCOM is 71.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately QCOM wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on QCOM were disappointed as the stock returned -10.8% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.

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